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At any cost: The South African fraudsters who took the tech world for more than $40-million

I first met Eran Eyal back in about 2010 when a colleague and I were doing an interview on local fast-growing companies. 

He struck me as an intelligent and gentle soul, perhaps as just the kind of entrepreneur whose company you’d invest a few hundred thousand dollars in

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At the time Eyal had leapt to fame as the co-founder of Springleap, a start-up that had pivoted from an online t-shirt company to a crowdsourcing platform for market experts and designers. 

Later he went on to run retail tech Shopin which netted $42.5-million from investors in an initial coin offering (ICO) in 2018.

By the time I next saw him, on one cold day in late February last year, a noticeably frail Eyal was in body shackles being led away by two US marshals outside a court in New York after being sentenced for defrauding investors of over $40-million.

As detailed in a new book At Any Cost published in February, the court found among other things that he had repeatedly lied about who his clients and investors were, had hired a hacker to web scrape profiles off Fiverr to bolster claims that Springleap had access to 180,000 creatives and had used two fake pilots with top retailers to secure investment for his ICO.

Like everyone else when the news landed in August 2018 that he’d been arrested and taken to the notorious Rikers Island prison, I initially struggled to believe it was the same Eyal I knew.

The authorities had to have gotten it wrong, I thought. Perhaps these allegations were just down to a few administrative errors that Eyal had made on investor and pitch deck material? Perhaps, as he himself suggested, he was framed by those eager to see him fail? 

Yet as the case progressed a picture began to emerge of someone who would go to any lengths to fleece investors.

The court records and over the three-year investigation by the New York Attorney General’s office confirmed that these were no administrative mistakes. Eyal had even gone so far as to carefully alter account statements for his Robinhood investment account by inserting an extra digit to inflate his true worth.

When I contacted Eyal before making my way to New York, he told me that he would not be able to talk to me because doing so might jeopardise his plea agreement on which he was convicted. 

It was soon clear that I would not have been able to speak to him anyway, as he was being held by immigration and customs enforcement (ICE) on a visa violation. 

Unable to speak to Eyal, I tracked down those who had worked for him, investors who were scammed by him, old school friends, and even ex-girlfriends. Some did not want to talk, perhaps because of the legal risk as at the time the case was still ongoing, or perhaps because they feared the negative backlash of being associated with him.  

In the end, it was the court records that yielded most of the material for the book – and laid out the hard cold facts of what had gone down in Eyal’s years-long fraud saga.

The 46-year-old entrepreneur was ultimately given a slap on the wrist – he was told to pay back the $600,000 he’d stolen from the four investors who reported him to the authorities and banned from doing business in New York State for three years, before being deported in May last year to Israel, the country of his birth.

Most believe he got off lightly. Yet what was clear from speaking to those swept up in the saga is that Eyal left a trail of destruction from those who once trusted and admired him. The question is, will anyone ever learn to trust him again?

At Any Cost by Stephen Timm is published by Tafelberg and available for R310.

Book cover (Supplied)

This article was written by Stephen Timm.

Featured image: Former Shopin and Springleap founder Eran Eyal (Facebook)

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